What To Expect From Tesla's Annual Shareholder Meet

Tesla Inc. (TSLA) will host some shareholders at its Austin, Texas gigafactory for its annual general meeting this week where they will vote on five proposals—election of directors, approval of executive pay, and the company’s auditors.

Tesla's shareholder meeting takes place on Tuesday at 4 p.m. Eastern Time, and will also be available via streaming.

One controversial proposal on the agenda is to have shareholders vote once every three years on executive pay, instead of an annual vote. That has generated some shareholder backlash, with a shareholder calling for a vote against Tesla executive pay committee chairman Ira Ehrenpreis. To be sure, even though shareholders vote on executive pay every year, that vote is normally not binding. That means companies can still go ahead with executive pay decisions that shareholders oppose.

The latest meeting comes after a rollercoaster year for Tesla shareholders with the stock price down 35% from the same period last year, while the broader consumer discretionary sector is up 1.3%.

The company has struggled with supply chain issues and a prolonged Chinese lockdown, however, its sales have hit record numbers. The most recent earnings were hit by a significant drop in profit margins from the company’s price cut strategy and investors will be interested to hear any updates on the path ahead at the annual meeting.

Though Musk has not discussed succession planning in public, a Wall Street Journal article that touted Chief Financial Officer Zachary Kirkhorn as a potential successor to Elon Musk. The report said Kirkhorn "handles many day-to-day duties in the manner of a chief operating officer,” and Tesla board members have discussed Mr. Kirkhorn as a possible successor." The article compared Kirkhorn and Musk’s relationship to that of Steve Jobs and Tim Cook at Apple before the latter took over.

Tesla investors have only just celebrated the news Musk would hand over the reins at Twitter to Linda Yaccarino. With a new executive running the social media company, there was hope Musk would be able to focus all of his attention on Tesla and halt the recent stock price decline.

On Monday, Musk lost an appeal to reverse a federal court decision that did not allow him to revise his consent deal with the U.S. Securities and Exchange Commission. Losing this appeal means Musk must continue to have his tweets previewed by lawyers.

Musk was in France yesterday meeting with President Emmanuel Macron at the "Choose France" summit, with politicians seeking to tempt the billionaire to build the latest gigafactory in the country. Tesla recently announced plants in Mexico and Shanghai but has set a lofty target of 1.8 million deliveries this year.

Correction—May 18, 2023: A previous version of this article incorrectly listed the name of Tesla's CFO as Zachary Kinghorn. The correct name is Zachary Kirkhorn.